Sustainability Report 2023/24

Risk Management We have integrated climate-related risks into our multidisciplinary Enterprise Risk Management, and climate-related risks are reviewed in our risk register. We assess climate-related physical and transition risks and opportunities to our assets, business operations and value chain. This analysis allows us to understand the potential climate risk exposure and shape long-term strategies to enhance our resilience and adaptation to the ever- changing climate. We use mixed-method scenario analysis to examine impacts over short/medium-term (up to 2030) and medium/long-term (up to 2050) timeframes. These timeframes are chosen to align with the global objective of reducing emissions and achieving net zero by 2050. In line with the TCFD recommendations, we have constructed two sets of distinctive climate scenarios to consider and better understand our business resilience and robustness under different plausible future states. The two scenarios, Turquoise and Brown Scenarios, are developed based on publicly available scenarios issued by esteemed organizations, including the Intergovernmental Panel on Climate Change (IPCC), International Energy Agency (IEA) and Network for Greening the Financial System (NGFS). The scenarios incorporate a wide range of factors, including political, environmental, economic and social indicators. By assuming various levels of population size, economic activity, weather patterns, energy usage, land-use patterns, technology and climate policy, these scenarios provide data projections that enable us to consider the potential impacts of climate change over the chosen timeframe. Reference on publicly available scenario: Turquoise Scenario represents a world with global mean temperature rise of 1.5°C to 2°C by 2100 compared to pre-industrial level, envisages an economic development that is inclusive and respects environmental boundaries, with countries committing to achieving net-zero by 2050 and implementing stringent climate policies with ease. There is a swift transition from fossil fuels to renewable energy, with corporations dedicated to lower-carbon operations and contributing to climate action objectives. Detailed plans with short-term targets are in place, resulting in a decarbonized economy with low physical risk but high transition risk. 7 Data up to 2021 was considered in the scenario analysis. Brown Scenario represents a world with global mean temperature rise of above 3°C by 2100 compared to pre-industrial level, depicting a future where economic growth and technological advancement are driven by fossil fuels, resulting in elevated GHG emissions, and worsening extreme weather events. Despite pressing environmental concerns, there is an absence of new climate policies and insufficient short-term action plans due to institutional, political, and economic challenges. A profit-centric business model values financial gains over environmental and social impacts, and a lack of public awareness further prevents system wide transformation. As a result, this scenario presents a high physical risk but low transition risk. Brown Scenario • RCP 2.6 • SSP 1 • IEA SDS 7 • NGFS Orderly pathways • RCP 8.5 • SSP 5 • IEA STEPS 7 • NGFS Hot house world pathways Turquoise Scenario Sun Hung Kai Properties Limited | Sustainability Report 2023/24 < 33 > Our Reporting Approach Message from the Sustainability Steering Committee Our Business Our Approach to Sustainability Value Created for the Environment Value Created for People Value Created for Customers Value Created for Supply Chain Value Created for Community Appendices